collateral

American  

[kuh-lat-er-uhl] / kəˈlæt ər əl /

noun

1. Finance. property or other assets pledged by a borrower as security for the repayment of a loan.

   He gave the bank stocks and bonds as collateral for the money he borrowed.

2. Anatomy.

   1. a subordinate or accessory part.

   2. a side branch, as of a blood vessel or nerve.

   3. collateral circulation.

3. a relative descended from the same stock, but in a different line.

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adjective

1. accompanying; auxiliary.

   He received a scholarship and collateral aid.

2. additional; confirming.

   collateral evidence;

   collateral security.

3. secured by collateral.

   a collateral loan.

4. aside from the main subject, course, etc.; secondary.

   These accomplishments are merely collateral to his primary goal.

5. descended from the same stock, but in a different line; not lineal.

   A cousin is a collateral relative.

6. pertaining to those so descended.

7. situated at the side.

   a collateral wing of a house.

8. situated or running side by side; parallel.

   collateral ridges of mountains.

9. Botany. standing side by side.

collateral British  

/ kə-, kɒˈlætərəl /

noun

1. 1. security pledged for the repayment of a loan

   2. ( as modifier )

      a collateral loan

2. a person, animal, or plant descended from the same ancestor as another but through a different line

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adjective

1. situated or running side by side

2. descended from a common ancestor but through different lines

3. serving to support or corroborate

4. aside from the main issue

5. uniting in tendency

collateral Cultural  

1. Property or its equivalent that a debtor deposits with a creditor to guarantee repayment of a debt.

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Usage

What does collateral mean in loans? Collateral is an asset, such as a home or a car, pledged by a borrower that a lender accepts as security against a loan in case the borrower for any reason cannot pay back the loan. If a borrower fails to pay back a loan, the lender can seize the collateral and sell it in order to recover the loan amount.

Other Word Forms

• collaterality noun
• collaterally adverb
• collateralness noun

Etymology

Origin of collateral

First recorded in 1350–1400; Middle English, from Medieval Latin collaterālis, equivalent to col- a variant of com- + Latin laterālis “on the side of the body”; col- ¹ lateral

Example Sentences

Wall Street banks lend to private-credit firms, with the loan funds as collateral.

From The Wall Street Journal • Apr. 1, 2026

The clearinghouses hold the collateral on each side of a contract, transferring risk from trading parties to the clearinghouse itself.

From Barron's • Mar. 24, 2026

Other banks have also recently launched fresh examinations of exposure to private credit including reviewing loan portfolios and collateral advance rates, The Wall Street Journal has reported.

From The Wall Street Journal • Mar. 24, 2026

That would split the stadium from the club, and as Old Trafford is used as collateral for the current long-standing debt, how that would work is not clear either.

From BBC • Mar. 24, 2026

Wergin was Kappe's collateral, so Haupt wouldn't "double-cross this whole thing."

From Nazi Saboteurs by Samantha Seiple

Related Words

• ancillary